-- just please take my advice on this, if you're a woman and invited to appear with megyn kelly, don't go in the studio with her, they put you down across from her. connell: it it doesn't work. imus: it's the not going to work out for you, just phone it it in. what else, warner. >> 49ers traded alex smith to the chiefs, 2 of 14 and immediately got rid of matt castle and finally, at least three of 28 injured spectators last saturday in the daytona crash, filed a lawsuit. unless they can prove negligent it says on the back of the ticket, the spectator assumes all risk. imus: well, they need to-- that's where they want to go, and do it with elegance or with,

whatever. happy birthday to jason aldean. ♪ ♪ ♪

♪ ♪ imus in the morning ♪ >> the president walks back armageddon, not so bad after all. my, how times change. good morning, everyone, quote from last night. a lot of people may not notice the spending cuts. really? whoa, that's a far cry from the disaster speeches the president was making all week. thousands outtafter job, meat not inspected, children not vaccinated.

but now, a lot of people may not notice. why the switch? why retreat from the armageddon threat? perhaps the president knows it was political grand standing all along. after all, will the sky really fall if we make a tiny spending increase reduction? so, here is where we stand. the cuts hit tomorrow. most people won't notice. ben will keep printing and the dow industrials could hit an all-time high soon. "varney & company" is about to begin. [ male announcer ] at his current pace, bob will retire when he's 153, whh would be fine if bob were a vampire. but he's not. ♪ he's an architect with two kids and a mortgage. luckily, he found someone who gave him a fresh perspective on hisortfolio. and with some planning and effort, hopefully bob can retire at a more appropriate age. it's not rocket science. it's just common sense.

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>> good morning, everyone, we are indeed on the brink of recession. in the last three months of 2012, the economy grew at an annual rate of 0.1%. absolutely miserable. barely any growth at all. all the economists were forecasting a very nice bounce. we did not get it. clearly this is not a robust economy, you just can't spin it that way.

despite that, your 401(k) has been on a tear this week. the dow jumped 300 points in the last two days, that is a rally. we're now 89 points away from the all time high on the dow. what's going on? one, ben says he's going to keep printing money. two, with a .1% growth rate he will definitely keep printing money and three, if the president is indeed retreating from the sky is falling threat, then perhaps spending cuts won't be so hurtful after all. now, look at this, please, the white house threatens a big name reporter, bob woodward, the watergate guy, the man who says that sequester is obama's idea, he gets an e-mail from the white house telling him he could quote, regret staking out that claim. regret. about obama and the sequester that is. sound like a threat to me. who sent that message? jean sperling, senior economic advisor to the president. could be a sign that the tide is turning. could the obama administration's honeymoon with the mainstream

media be over? you'll get my take on that at 10:25. right, no growth in the last three months of last year, when everyone was shopping for christmas and the holidays. but we're still 89 points away from the all time high. perhaps traders new all along that the president's threat of economic armageddon was false. the opening bell is next. dad, i'd put that down.

ah. 4g, huh? verizon 4g lte. 700 megahertz spectrum, end-to-end, pure lte build. the most consistent speeds indoors or out. and, obviously, astonishing throughput. obviously... you know how fast our home wifi is? yeah. this is basically just asast. oh. and verizon's got more fast lte coverage than all other networks combined. it's better. yes. oh, why didn't you just say that? huh-- what is he doing?

>> a minute from the opening bell. 89 points from an all time high. i want to see wall street's reaction to the lousy economic report we got. 0.1%, that's virtually no growth at all. let's bring in larry levin from chicago. larry, that's, that's a lousy economic performance, does it hurt the stock market today? >> i think it would hurt the stock market if we were in a different place, right? you mentioned how close we are to the all time high, stuart. and that's really what's in play and traders minds. they're kind of ignoring that. at least for now. but a couple of days from now, maybe they he won't ignore it, but right now, it's a situation where the all time hey is in play and appears where the market wants to go. stuart: of course, ben keeps printing. and state right there. we'll get back to you right after the opening bell.

we're looking for a 10 point loss after the opening bell. and i'll repeat the gdp number final period of last year, holiday season, basically the holiday expanded at an annual rate of .1%. it was originally reported as a contraction, .1%, turn it around, .1% gain. that is nothing, that is miserable to. big board, yeah, we are ten points lower from the get-go, puts it at 14,066. here is a big name you know and boy is this thing lower, groupon, it lost money and expected to make money, nicole, how bad is it. nicole: the latest quarter, you can he see to the down side this morning in a big way for groupon. and most of the company had to cut their revenues in order to lure the merchants and it's down looks likes 28%. stuart: that's a drop and a

half. nicole: this crowd is for j.c. penney which is not open here yet. stuart: that thing could be down 25% i've got a couple more big names you know, the man who major retail magic and apple, look at this, not having much success thus far at j.c. penney. the company reported a much wider loss, very weak sales, it's not going back to bringing in big weekly sales, big discounts. that's a reversal of its recovery program for j.c. penney. it doesn't like that. the market doesn't like it, down 15%. tough economy turning out to be good news for dollar frtree. we mentioned that sales continue to grow and discount chain sales are up. why is that? you've got less money in your paycheck and main you're out there looking for bargains. and this is a bargain store. moved up yesterday, 10%. no pullback seriously today and that's all we've got.

two stories there. let's go back to larry levin in chicago. i've got this for you, larry. late yesterday the president in my opinion seemed to walk back the doomsday scenario. if we cut spending the sky falls, he appeared to walk that back a little yesterday. any difference to the stock market because of that, what i'm calling a walkback? >> we saw the stock market having a rally for a few things. i can a lot of people are trying to get from the gdp thinking it would be good and seeing how that turned out, but certainly, that was a big kind of turnabout or you know, 180 degree turn as far as what he was saying before. and stuart, i think that traders down here, they're not really concerned about it. they, you know, they know that the president says something one day and the next day he says something else and we're kind of getting used to that here. stuart: not a factor on the market. larry, thank you for joining us so early in the morning. thank you. joining us now from capitol hill is the democrat, the senator from the great state of montana,

john tessa is with us. welcome to the program. i want you to hear precisely what the president said yesterday, i'm calling it kind after doomsday walkback. listen to this and see what you think. >> conceivable that in the first week, the first two weeks, first three weeks, first month, that unless your business is directly related to the defense department, unless you live in a town that is directly impacted by military installation, unless you're a family that now is trying to figure out where to keep your kids during the day because you just lost a head start slot, a lot of people may not notice. stuart: it sounds to me, senator, that the president understands that the sky is it not going to fall. what do you say? >> well, i think that there was a lot of caveats to his statement, but let me just say this, stuart. i think that the fact that

congress has not done its job in relationship to the multiple crisis that come about, about every 60 days, we ev've been do this for over a year and a half now, i think hurts the economy's ability to grow and expand, which you just talked about a second ago. this country's got incredible opportunity out there. the state like montana where we've got incredible energy opportunity and we've seen commodity price ins all time high for years and years on end. we've seen the housing market start to pick up. washington d.c. has been kind of a boat anchor and quite frankly, the sequester stuff is a big part of it. stuart: mr. senator, the republicans and some democrats in the senate they want to put forward a measure which would give the president the leeway to decide where the cuts are actually going to fall. give the president the power to layoff this pain, if he wants to. would you support that? >> no, and i'll tell you why, stuart, just congress needs to

do its job. a few years ago we gave the ability to appropriate money to the executive branch. now we're going to tell the executive branch that the legislative branch can't do its job and and we're going to give him the power? look, we need to sit down as americans, not as republicans, democrats or independents, and come up with a solution to this problem of continual bickering over the debt. we need a long-term solution for our debt and deficit and congress needs to do it. to say that we can't do our job, to prioritize spending in this country is absolutely does not give us any credibility whatsoever. saying mr. president you take care of it. stuart: is it legitimate for the president to say, we're going to inflict maximum pain. the sky will fall, unless you do something about it? unless those wicked republicans raise taxes. is that legitimate to say that, sir? >> look, i don't think he says maximum pain and-- . mr. senator, he appeared before

a back drop of first responders and said that tens of thousands of jobs would be cut. children would not be vaccinated. teachers would be laid off. border security impaired. he is threatening armageddon unless the republicans raise taxes. >> look, what i think-- i think what needs to happen, quite frankly, there needs to be a broad-based agreement that there's going to be some spending cuts, we've got to close some tax loopholes, make no mistake, it has to be broad-based and we can't keep drawing lines in the sand. i'm in business myself, i still farm, but the fact of the matter is there's going to be impacts. i'm already getting calls and e-mails from people in the live stock industry saying, look, if we -- and about 90% of their budget for the meat inspection service is for salaries, if they cut back on these meat inspectors it's going to have an incredible impact, it also is on the markets. stuart: he doesn't have to, the president doesn't have to cut the salaries of meat inspectors,

and he can have the power to shift to elsewhere in the agriculture department, he has the power to do that. >> i don't know that. stuart: he do. >> what i know congress has not done its job and come forward with a long-term plan on our deficit and debt and congress needs to accept up and do it and we need to put the party stuff behind us and move forward. it doesn't-- pt should not be all tax increases, should not be all cuts, a combination of both and we've got plenty of programs that have outlived their usefulness and plenty of loopholes in a complicated and antiquated tax code that needs to be fixed. stuart: i regret to say, sir, that montana is the only state in america which i have never been to, i'm sorry about that. >> you've got to come. stuart: i need to go there. >> you've got an invitation, and we'll show you beautiful country. stuart: if you're not careful, i'll take you up on it. we appreciate you being here. >> thanks. stuart: to nicole and we have kohl's the share price is down

and we want to know why. >> down 4%, they did so many markdowns during the holiday season in order to get the sales and inventory out. they came out with numbers that were dismal. stocks down over 4% and i can't believe you've been to every state in america with the exception of montana. stuart: it's true. nicole: what's your favorite? >> my favorite? new jersey. [laughter] i really like new jersey. you're speechless, i don't know why. nicole: they told me to be quick and i wanted to get the answer and be quiet. stuart: good one, nicole. thanks very much. try this one for size. do you remember colorado's governor, john hickenlooper, the man who drank fracking fluid to prove it's safe and he's taking the support for this controversial drilling method taking it further. find out what he's doing in his own state to get fracking on board. this will be new at 10 this morning. seven early movers. gun maker sturm ruger, up,

people clearly pushing to firearms. had a nice run and nordstrom buying back shares up goes the dividend. 54 a share for nordstrom. groupon bigger loss and slowing growth the. the market hates that, down 24%. weak european economies hitting caterpillar, company plans to cut 1400 jobs at a plant in belgium. caterpillar up a little 92 bucks. disappointing profit at energy drink maker, monster beverage, the namesake brand continues to grow in the united states and it's up 3.8%, nice gain. better than expected profit and sales at sears, but it's down 10 cents. more money coming across the trans limited brand, victoria's secret company, clothing retailer gave a disappointing outlook, doesn't matter the stock is up. we're on the upside for the dow industrials, 14,083, 82 points

from the all time record high. time is money, 60 seconds worth of what else we're watching for you, much more on the phony armageddon that the president was warning about all week. we'll talk to congressman conway next hour on the agriculture committee. we'll ask him, are meat inspections really going to stop as of tomorrow morning, or saturday? really? the left i should say keeps pushing for green energy despite the fact that it's totally unreliable. case in point, california become so reliant on wind and solar it may face blackouts. why? because when the wind doesn't blow there is no electricity. mike reagan will be here. and the man talking about card counting methods, 10:45, mr. ma. and the national debt just

crossed 16.6 trillion dollars, showing no signs of slowing down. john stossel, look at this, just look at john. i think yes, look, why on earth is he riding a scooter into my studio? to prove a point about our spending rubbing off on future generations? john on a scooter next. (announcer) at scottrade, our clients trade and invest exactly how they want. with scottrade's online banking, i get one view of my bank and brokerage accounts with one login... to easily move my money when i need to. plus, when i call my local scottrade office, i can talk to someone who knows how i trade. because i don't trade like everi'm with scottrade. me. (announcer) scottrade. awarded five-stars from smartmoney magazine. ♪

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thing. top of the hour coming up. now, here is what you're waiting for, john stossel. he is here, during the break riding a scooter into the studio. what? i think perhaps this clip will explain why. >> excuse me, i need to take this phone. >> what are you doing. >> i'm old, i need to-- >> i need this stuff. >> stop, stop. >> and take this scooter. >> hey, give that back! >> taking things from kids is nice for me, but the rest of you have to deal with the debt bomb. >> oh, he's here right now, sitting scooterless i might add. what's this, our spending is robbing our children. generational theft, and people our age say i paid into medicare my whole life and getting back what i'm due, but we're getting back two to three times what we paid in. it's unsustainable and president obama says the sequester is hike taking a meat cleaver to the budget, but the sequester

doesn't touch medicare and on the part it does, on the military and the discretionary, it's -- you could say it was more like a parring knife? it isn't a parring knife. this is what happens to spending and even with the cuts, he has the redline without, blue line with, there's hardly a difference, you can say it's unfair not adjusting for inflation, next slide adjusting for inflation, still, spending goes up with the sequester. stuart: so it's a misnomer, you can't say, well, we're cutting. and-- >> cutting from what they were going to increase. stuart: right, as you said the slide pointed out. spending keeps going up even with the cuts, we're just reducing the amount of increase in our spending, that's what we do. >> after inflation and adjusting for population growth. stuart: i believe you have a

couple of questions for me, is that correct? is this a quiz? >> on my show, we have a real or fake quiz. there's nothing we can cut from the government, but here is what government spends on. is this real or fake. $75,000 for a radio series of poetry composed by prisoners called the prison poetry workshop. stuart: you're asking me is that a real or a fake program? >> yes. stuart: look, it's strange credulity, but i'm going to say fake. >> okay. and one more before i give the answer, $220,000 for researchers to discover new methods for killing cockroaches without toxic chemicals. stuart: oh, that i believe is real. >> yes. the opposite was true. stuart: you're kidding me. >> the point is that you can't know, they spend it on garbage. and say-- oh, can't cut anything or you won't have meat. stuart: the point is anything is believabling. because the spending is so crazy. i would believe anything you tell me is a real government program and it's not.

>> that's right. stuart: john, that's a very good program coming up. tell us where and when. >> ten o'clock tonight on fox business. stuart: excellent stuff. thank you, john. great stuff. breaking news on the keystone pipeline, the canadian energy minister says he does not expect the pipeline to be rejected. that's interesting. s most definitive word we've heard on keystone and comes from canada. he does not expect it to be rejected. stossel's got his cleaver in his hand, i don't know why. what's that got to do with the pipeline. >> just, it was ready. stuart: let's go to the gold report, shall we before you do serious damage. 9:49 eastern, 1587 retreating a bit away from 1600. the question for you, would you let a stranger go through your mail? open it, scan it into a computer, then e-mail it back to you for a small fee? would you let anybody do that? well, one start-up company is offering precisely that service.

here comes liz and charles, they will comment. ♪

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>> hey, moments ago we crossed

14,100. we're 60, 70 points from the all time record high, we're watching that for you. listen to this please, a start-up company called outbox will come to your house three days a week and pick up the mail dropped by the postal service, open it, scan it into a computer and then they'll e-mail it to your service, your e-mail. your computer. 4.99 a month, the company says 10,000 people are on a waiting list. all right, everybody. i can't believe that they would want someone to open their mail. i can't believe it. charles: it's hard for me to believe. i'm an old-fashioned guy. if you have direct detroit police and everything else is junk except the christmas card from an aunt you haven't seen in a while maybe makes sense for five bucks. stuart: if you're an invalid, not laughing, can't get to the mailbox, i understand that. do you want anybody going to your mail. >> no, i don't like that. the junk mail, coupons maybe

handle that. rather have an app for somebody to do my laundry than go through my mail. that's too personal. even though my laundry is, too. stuart: 10,000 people on the waiting list. >> amazing that we've come to this. charles: i think it's people are going to go for it, i think we're too old to appreciate it. stuart: thank you. speaks for yourself. great job, welcome back. . [laughter] the co-founder of this company, by the way, this e-mailing and the mail stuff, he joins us tomorrow. very interesting. do you remember bathtub jeff, the former official who spent lavishly on trips to vegas? they haven't learned their lesson, how much they spend on conferences, why not cut that. and the pro-fracturiking govern he drank liquid to say it's safe. [ male announcer ] i've seen incredib things.

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thrifty has been forgotten. then we have the 156 million dollars paid to federal workers last year for not working. the union guys. they worked full time for the union, but they were paid by the taxpayer. why can't we cut here? instead of kids vaccines, why not cut junkets? this is the kind of thing that drives taxpayers crazy. maybe that message is getting through to the white house because the president is now beginning to retreat from his armageddon threats. on the spending cuts, he now says a lot of people may not notice. stuart: do you remember the governor of colorado, the one who drank fracking fluid to prove it was safe? he's deffnding fracking again. the governor says he will sue any city in colorado that bans

fracking. more on that in just a couple of minutes. we're going to talk about that and a whole lot more with our company this hour, and our company is elizabeth macdonald, charles payne and nicole petallides. look at the big board for a second. the dow is up 10 points. we got a miserable number on gross domestic product, the big picture economy this morning. it's only growing .1% a year. now look at that -- one of the stocks that really is moving, an individual stock. it is groupon. not good news there. give us the full story, nicole. nicole: groupon big loser, down about 24% here. when you talk about groupon, you talk about daily deals. what they have had to do is cut the costs so that the merchants will get on there and give the deals and be involved with this type of company, which is obviously over the internet, people can go locally and get these great deals in their neighborhood, whether it's a restaurant or a salon, or whatever. in the meantime, they are really not making the money they had hoped and the stock is a big loser. stuart: hold on a second,

nicole. as we were saying groupon is a big loser. charles payne is sitting here and saying oh, yeah, great, what's with that? charles: it is devastating when a stock s down that much. a major firm just upgraded it recently. that's a tough one. stuart: you did not recommend it as one of your money making deals? charles: absolutely not. stuart: jc penney, that's a serious loser there. nicole, do you want to explain this one to us? nicole: jc penney, they did a lot of mark downs. of course you know they have had a whole issue about how they are running this company, whether they are going to do promotions, not do promotions, change in management. these two stocks alone are horrendous. if you are a shareholder today, i mean, you are very upset with this kind of move, not bringing in the numbers. stuart: all right. ladies and gentlemen, i want to put nicole full screen, hold that shot, please. because nicole petallides has just been named greek american woman of the year.

congratulations. [clapping] nicole: thank you. i'm not sure i deserve it, but it will be a nice event this weekend. thank you. stuart: thank you very much indeed, nicole. new jersey says yes to on-line gaming. and that gave gambling stocks a boost, including zynga. it is now considered a gaming stock because somebody has got to outline how you do this on-line stuff to the states and the casinos. well, zynga is up again, up almost 1%. a nice run recently because of on-line gaming. and later this hour, jeff marr joins us, the man who made millions counting cards in vegas. how will on-line gambling actually work and how much money is it really worth to the state? 10:45 this morning. earlier today i quoted the president who said a lot of people won't see the effects of the spending cuts right away. i'm calling that a doomsday backtrack. charles, let me give you the precise expression from the president.

a lot of people may not notice the spending cuts. i think that's completely different from what he was saying earlier in the week. he's retreating. charles: there's absolutely no doubt he's retreating. it is good to be the president when you have the media in your hands. because now everyone is pushing the agenda for him. i'm riding into work this week, and i'm listening to wbls and they are banging the drums, the world is going to end on march 1st, everyone. all of his people are doing the work for him. the boy who cried wolf act gets a little dull after a while. what happened to leadership? liz: we have a crisis in how we govern ourselves. the gloom and doom magical mystery tour isn't going to play well in the united states. this is a campaign event. he's trying to help the house democrats so they can take back the house. i think it should be treated as a campaign event, this tour he's going to do about spending cuts. stuart: it's a constant campaign. he's the leader of a political party, not the leader of the united states of america. that's a personal opinion. charles: he's done a great job

as leader of a political party and a terrible job as president of the united states. liz: this year with 3 1/2 trillion dollars budget ets, only less than 2% growth and still 3 million people more out of work since the president took office. stuart: i think that sums it up there, liz. thank you very much. our next guest is a former supporter of president obama, but he now says -- this is what he says about the president now, quote, he wants to be -- he wants to redistribute wealth, take money that was honestly earned by people who struggled and suffered, and paid the price to win that money and give it to people who don't have to do a thing. very interesting. strong stuff. joining us is harry alford. sir, welcome to the program. >> good morning stuart. stuart: why have you done such a complete about-face? you voted for the president in 08 and 12. >> well, the truth will change your mind. as he went along with his lack of leadership and coming up with all of these socialist ideas,

pro-union, not even caring about his constituency, doing things that are just wrong for america. it hurt my constituency, black business, we are at an all time low in doing contracts with the federal government. we're at an all time low in capital access through the sba. he put in project labor agreements which are union only for construction projects. 98% of my constituents are in the construction business are non-union. when you put up a project labor agreement, you are saying need not apply. stuart: what proportion of the people in the black chamber of commerce, what proportion feel the way you do now, it's not a president who is really helping the overall economy period? >> it is growing immensely, i remember a few years ago, bringing it up at a board meeting, and i got jumped on. now, when i bring it up at a board meeting, everybody's nodding their heads and we're

talking in unison that something needs to be done. our membership is growing because it's like the church, when times get bad, you go to church. when the economy gets bad, you join your business association. so we're rolling on that end, but we've got to do something to change this tide for our children's sake and for our grandchildren's sake. stuart: charles? charles: how is it going? this is charles payne. we met down in d.c. not too long ago. hope things are getting better. here's the question, though, how do you get this message to the white house effectively, or is the bottom line that the president has an agenda written in stone, and ultimately a lot of people who thought he was on their side are finding out the hard way that maybe he's not? >> he's committed to what he's doing. and it's like the full speed ahead. i think he's very convinced that he's going to do it his way even though it may not be the right way. it is going to be his way. that is a sad picture. i've never -- i'm 65.

i've never seen a president like this. stuart: what do you say about the spending cuts that probably take place in the immediate future? the president says the sky is going to fall. we think he's maybe retreating from that line a little bit, but he's pushing serious damage, he says he is, what do you make of it? >> much to do about nothing. 2.2%? give me a break. that's easy to do. you know, i was in corporate america, if we had -- spending cuts -- budget cuts were being rumored, then the boss comes in and says you are going to cut it 224%. we'd all start laughing. no big thing. thank you. [laughter] stuart: harry alford, black chamber of commerce with us today. thank you very much indeed sir. appreciate it. >> thank you, appreciate it. stuart: one of the states that is the worst for business, california. so bad that texas governor rick perry recently went on a recruiting trip to california to bring business back to texas. adam shapiro is in palo alto of

all places and you have governor jerry brown's reaction to per -- perry's efforts. did governor brown admit businesses are leaving california? >> no quite the contrary. governor brown sells california as a governor should do for their state. let me let you listen to what the governor says about the business situation here in the state of california. >> do you think a few trips from politician is going to make any difference? people invest their money where they think there's a return. the ideas, the infrastructure, the climate, the opportunity is right here in the pacific rim. adam: but when you speak to different people here in california, they point out this is not a great place to do business. in fact, real quick, stuart, let me read you, the l.a. times had an editorial talking about rick perry. they don't like rick perry here. but the l.a. times said to governor brown, the state has a long way to go to get its job

development act together and the time to start is now. that would be the best way to wipe the smirk off rick perry's face. stuart: it's a good story. texas versus california. california versus texas. you will be at lovely palo alto all day with this story. i envy you. adam: we will be talking with different representatives from arizona and from virginia who have successfully and quietly lured businesses out of california. stuart: thank you very much indeed. we will see you later. california bet big on green energy. here's the problem, the state's shift to wind and solar makes it very hard to keep the lights on. mike reagan will join us on that subject, 10:35 this morning. back to the company, the colorado governor, he wants to sue cities that are banning fracking. what do you say? charles: absolutely. it's absolutely -- this is -- it absolutely boggles the mind this battle against -- you know the current issue in national

geographic there's a negative article on fracking, but you can take so many positives out f it. one thing i love is this illustration of just how deeply they drill for this oil. it is literally more than seven empire state buildings below ground water, seven empire state buildings below ground water. you know, but i'm glad he's taking this approach. stuart: i was intrigued he won't allow cities urban areas to ban it. rural areas is where you are going to be doing the fracking. liz: i like how he did drink the fracking fluid. did he light it to make a flaming shot out of it? no i'm kidding. the problem is he puts himself into a box here. cities in colorado are allowed to ban recreational use of pot. they now have to do fracking? there's a conflict he's putting himself into a bind there. i'm also wondering what does he serve at new year's eve if he's drinking fracking fluid? stuart: okay. it is a legal sort of conflict. if you allow pot but you don't allow fracking, is that a

contradiction? liz: he's saying the cities are allowed to ban pot usage. the cities in colorado. but at the same time, he's saying to the cities, look, we are going to sue you if you do not allow fracking. so, you know, how do you play both sides of that coin? stuart: he's going to sue if they don't allow -- that's the other way around. sue you if you ban fracking. liz: right. stuart: i have it. okay. bottom line is i want state governors to get out there and allow them to get what is ours. liz: to get economic activity going. charles: andrew cuomo, are you going to kick this around for the next four years, make a decision. stuart: i want to see what he does. are meat inspectors really going to be furloughed when the cuts go in effect? we have a guest on that next. but first here's what democrat senator said in our last hour. >> it should not all tax

increases. it should not be all cuts. it should be a combination f o both. -- of both. we have plenty of programs that have outlived their usefulness. we need to take a look at them and eliminate them. we have plenty of loopholes in a very complicated and antiquated tax code that need to be fixed. [ shapiro ] at legalzoom, you can take care of virtually all your imptant legal matters in just minutes. protect youramily... and launch your dreams. at legalzoom.com we put the law on your side.

stuart: all right. here's the new numbers on the economy. it grew at an annual rate of 0.1%. truly awful. this is not a robust economy.

and the market is -- well, not responding at all to that news. it's up what 7 points. that's what we've got. jc penney, big drop for the stock. its grand transformation plan is not working. it reported its biggest drop in sales in more than a year. huge drop actually. jc penney brought in ron johnson to try to transform the chain. not having much success. it is down 20% today. investors expected a big profit from groupon but the company took a hit instead. lost millions in the first quarter. that stock is down 23%. pope benedict xvi pledged obedience to his successor in his final meeting with cardinals this morning. back in 90 seconds. staying active can actually ease arthritis symptoms. but if you have arthritis, staying active can be difficult. prescription celebrex can help relieve arthritis pain

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t help right away if you have swelling of the face or throat, or trouble breathing. tell your doctor your medical history. and find an arthritis treatment for you. visit celebrex.com and ask your doctor about celeex. for a body in motion. stuart: sitting behind your desk could kill you, studies show that sitting down for extended periods raises your risk of developing heart disease, blood clots even certain types of cancer. standing up for an extra 90 minutes a day could lower your risk. i would have thought that was stating the obvious. am i going too far? our next guest sits on the house agriculture committee. congressman michael conway, republican from texas. welcome, sir. good to have you with us. >> thanks stuart. good to be with you. stuart: i want you to reassure our viewers that meat inspections will not stop the moment that these spending cuts go into effect. you're on the agriculture committee. tell us, sir. >> well, that was obviously the implication i think of the

department of agriculture when they put that release out ten days ago or let that leak that they were going to do that, the implication was it was going to suddenly stop. i don't think that's the case. if you are a responsible manager and i hope secretary vilsack is, he will roll those furloughs through the system between now, march 1st and september 30th. there's no reason any one shop should be shut down. there will be perhaps less meat inspected but the implication was going to stop all meat inspection right off the bat was a scare tactic, unworthy of this administration. but nevertheless, that's the theme they have been doing throughout this process, but a good manager will keep that process going. maybe at a reduced rate, but nevertheless -- stuart: but congressman the point surely is the president has the power to shift these cuts around within departments, within buckets of spending, and that this infliction of pain is really quite deliberate. that's the way it looks to us. >> it's the way it looks to me as well. we will know tomorrow how they are going to do this.

but these series of scare tactics saying tsa lines will be lengthy, all those kinds of things, that's irresponsible. if you are a manager, you will pick out the things that are the most important that you are supposed to be doing and you will get those done. and the other things that are less important will be the ones where the cuts are taken. but again this president, failure of leadership to prevent this and to not let this happen, but nevertheless that's where we are. and they've got -- the secretary vilsack as a responsibility, i believe, to execute these things in the least painful way possible still getting the savings that are going to be required out of department of agriculture, but do those in a way that are responsible and not ones that inflict the most pain either to the economy or to individual taxpayers. stuart: the president last night appeared to retreat from the armageddon threat. i will quote you exactly what he said. he said a lot of people may not notice the spending cuts. at least for a week, two weeks, three weeks, four weeks. a lot of people may not notice. i'm saying that that is a

retreat from the armageddon threat. that the president is softening his stand. maybe his bluff has been called what do you say? >> well, i think his bluff has been called. these things are going to happen tomorrow and the sun will come up on saturday as well. there will be effects. it will be a resetting time frame. the furloughs will happen and there will be individuals who are affected but it won't be dramatic tomorrow. things will go forward as they have been. it's relatively small cut against a total amount that's spent at the government and against the economy itself. stuart, as you know, we have some 14 trillion dollars economy. this is 85 billion dollars. it's meaningful if you're expected to be on the receiving end of that 85 billion. and it ripples because of certain things that have a value added to it, like meat inspection. this is not the end of the world. stuart: will you congressman michael conway, republican from texas, will you accept more tax

increases, whether they come in the form of tax rate increases or ending of certain loopholes and deductions, any way you slice it, will you accept a tax increase, another tax increase? >> no. stuart: okay. okay. is that true of your colleagues in the house? is that it? >> yes. speaker boehner is speaking for all of us in that regard i believe. under the umbrella of tax reform, through the ways and means committee where you lower the rates and you will have some of those things going on, we will be looking at that. a stand-alone tax increase as the president is proposing is dead on arrival with respect to the house of republicans. stuart: i think what a lot of people want is tax reform, that would be lower rates and some loophole closings in return for long-term entitlement reform. that would be a grand bargain which i think you would get behind and i think a lot of people would get behind, am i right? >> yes, absolutely. but this context of the sequester, stopping the sequester, offsetting the sequester, we are not interested in the least in raising tax

revenues that way. now, growing the economy and having more revenues come into the economy, vis-a-vis more taxpayers, those kinds of things, yes. but a tax increase that the president is proposing is not going to happen. stuart: many thanks for joining us today. a lot of things happening. thanks for taking your valuable time. we appreciate it, sir. >> thank you very much. stuart: my take on bob woodward, white house threats, and a possible end to the media's honeymoon with president obama. that's coming up next for you. [ male announcer ] how can power conmption in china,

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stuart: an hour ago we thought maybe we'd make a run at the new record high, but we're dead flat. we are up a point. that's all we've got so far. but barnes & noble -- i'm not sure -- it's up. this stock is up. significantly so. nicole, we always want to know why. nicole: right. so it seems that they are obviously having some talks. they are talking about e-book sales, which actually are not good news, fell 26% in the latest quarter. we're seeing the stock higher, which doesn't necessarily make sense, but it does seem that

they are moving forward with a plan pertaining to that platform and doing it in a different way. stuart: okay. pertaining to that platform. nicole: the platform in 09 as they established for the nook and they're going to -- i don't know let me delve into the 15 pieces of paper and i will get back to you. stuart: the stock is up and we will take it. thank you very much. i want to see this stock go up because charles is recommending it. the name of the stock is tempurpedic. do you know the bed, the mattress? stuart: i yes i do. liz: i own one. charles: this is one the administration may try to take credit for. initially the technology was

developed by nasa, okay. stuart: really? charles: they wanted something nice for the space shuttle. that was in 71. ended up selling it with a swedish company which merged with a company from denmark. one man a businessman from kentucky was in denmark and said this is pretty nice. then we got tempur-pedic. this stock has been phenomenal. that one hiccup cost them dearly. the chart is looking better. it closed above key resistance number which was 40. i think it is a 20% move from here. yesterday also the international sleep products association, they said january was phenomenal. sales were up. also pricing power. i love hearing those things. and these guys are acquiring sealy. so they will be at the top end and low end. i like tempur-pedic a lot. stuart: now to nicole with more on barnes & noble.

nicole: you talk about the books, that that portion of barnes & noble was going to be taken under another wing, not the nook. the nook, self-financed, manage their costs, generate cash flow in barnes & noble college business. with this and the on going discussion continue between the head, the founder, and the committee. which two things, one, it seems like they are going to separate the nook from the rest of it and also obviously supports the theory that this founder is still moving forward with the possibility of taking this part of private. and that's why you see the stock higher. stuart: got it. thank you, nicole. text from my wife, charles. listen to this, please. tempur-pedic was that horrible thing that we sent back. [laughter] charles: that's why the stock got hammered last year. okay. stuart: do you still want to recommend it? charles: i'm a little nervous

now. stuart: you should be. california brags about its reliance on green energy, that solar and wind power are the answer. here's the problem, they are having trouble keeping the lights on in california. mike reagan our voice of reason has the story for us and an analysis 10:45 this morning. the white house appears to have threatened watergate reporter bob woodward, but it's surely more than a mere media spat. maybe it's the start of something bigger and far more important. here is my take: bob woodward made headlines this week when he clearly showed that these spending cuts, sequestration, were president obama's idea. that's not what the white house wanted to hear. the obama camp says it's all the republicans' fault. now, woodward reveals an e-mail from the white house saying you will regret staking that claim. that is a threat. question, will the media now start to ask some serious questions? will they defend one of their

own? questions like, why are you cutting vital services first, mr. president? are you deliberately inflicting maximum pain? and why didn't you take questions from the media instead of running to compliant local anchors? the list of unasked questions goes on and on. but my point is this, perhaps the long, long honeymoon is drawing to a close. the president for four long years has pursued failed policies on the economy. the media has not held him accountable. in fact, they have done the opposite. they've been a cheering section for the president, and they have consistently excused his failure. no, they have covered up his failures. can you imagine the outrage from the new york times if george bush had given us 8% unemployment, 5 1/2 trillion in extra debt and 47 million people on food stamps, can you imagine

it? maybe, just maybe the president feels a media turn. after weeks of doomsday threats, late yesterday he said a lot of people may not notice when armageddon hits. that's a switch. [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all onhinkorswim from td ameritrade. ♪ omnipotent of opportunity. you know how to mix business...

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back a little walking back a little his armageddon warnings. now he says you may not feel the impact for weeks or even months if there's spending cuts. peter barnes is with us from d.c. all right, peter even the education secretary, he too is backing away a little bit from the armageddon rhetoric. what's the point here? peter: that right, stuart. the white house says in its fact sheet here that 10,000 teachers are at risk of losing their jobs because of the sequester. 7200 special education teachers, aides and staff could be cut. but yesterday reporters pressed the education secretary in a briefing for when all of this would happen and how bad it would really get. >> most haven't happened yet. it really has to do with union notification, so most of that stuff will start to happen in -- over the course of march and april. there are a couple districts one i know of in west virginia that has already issued notices because just because they have an earlier notification date.

peter: but stuart the washington post is reporting this morning that in fact that school district in west virginia is sending transfer notices about 100 teachers in response to a change in federal spending that is totally unrelated to the sequester. when pressed about that yesterday, about that district's changes, arne duncan said quote whether it's all sequester related, i don't know. stuart: i knew the sky was not going to fall, peter barnes. i just knew it. peter: sequester spin gets ahead of reality. that's the headline. stuart: the washington post, amazing. peter that was good. thank you very much indeed. peter: thanks. stuart: wind and solar energy causing some problems for california. it is intermittent, unreliable, forcing the state to use conventional plants as back up. now, problem with that too. they are closing down those back up plants. let's bring in mike reagan from reagan.com. all right, mike, i thought you guys were happy as clams out there in solar land. apparently all is not well in

paradise, i understand? >> hey, i've been trying to tell you how it is out here in california. welcome to the nutsy country club. this place is really something. think about this in 2014, every new home has to have a roof capable of carrying a solar panel. who is going to be able to afford that? think of 2020. every new building 10,000 square feet or larger is going to be required to carry its own energy source. it's going to be wind or solar. so as you drive past a 10,000 square foot building, they are going to have a windmill and a solar panel in the background taking care of their own energy needs. meanwhile, no power plants here. and one of the people who is a director, an attorney at the department of waterpower downtown sold his home and is renting because he says you are out of your mind to own a home in the state of california because energy needs are going to go up 60%. stuart: just by any chance, are

you running for governor of california? >> no, i mean they wouldn't have me. there is a convention taking place this weekend, up in sacramento. i'm not invited to speak. they don't even want me there because they tell me i may overshadow the leadership in the republican party of which i said you have leadership in the republican party in the state of california? stuart: wait a minute, mike. that's not the point. you have a republican party in california? i was not aware of it. >> yeah, so was i unaware of it. it's 29% registration at this point in time. $800,000 in debt at this point. and they haven't invited anybody to the dance this weekend who may in fact think about running for governor in the state of california because there's no get out the vote, there's no money. and the people who are actually running the republican party of state of california don't want to lose their power base, so god forbid they would ask a reagan to come speak and tell them what

they need to be hearing in the state of california to get back winning again because if you win, you get rid of those that have been running this state for too many years. stuart: all right. >> what can i tell you? the truth is the truth. stuart: it is. mike reagan, always a pleasure. thank you very much indeed. >> good deal. stuart: new jersey follows nevada legalizes on-line gambling. the state says it could raise millions. but how exactly will the state implement the plan? how do you play on-line? how do you do that? jeff ma is a former m.i.t. black jack team member gambling genius. he's next.

stuart: here's unusual headline for you, gas prices dropped a half penny overnight. the national average for a gallon of regular still up there at $3.78. it's been spiking for a month and a half almost. but it was down a little overnight. next check the price of oil. we have been around $92. we are still at $92 a barrel. the housing market, the latest read on freddie mac, the 30 year fixed rate mortgage is 3.p 51% -- 3.51%, down a tad from last week. starbucks customers are using starbucks wifi. they will be able to access 15 free articles a day from the new york times. otherwise you only get 10 articles a day if you are not in

starbucks on their wifi apparently. another company capping its service is pandora, the on-line music company is going to limit its free listeners to 40 hours a month, pandora. back in 90 seconds. [ woman ] if you have the audacity to believe

your financial advisor should focus on your long-term goals, not their short-term agenda. [ male announcer ] join the nearly 7 million investors who think like you do. face time and think time make a difference. at edward jones, it's how we make sense of investing. stuart: charles brings us stocks which he likes. we're going to follow up on one that he's done recently. he did like monster beverage. what's the follow up? charles: there's two things. first i want to let people know you have to avoid trading after the market closes on emotions.

the stock was down $3.50 in the aftermarket. people sold into that. look at this amazing reversal. we just took profits on half. this is a story. the company is growing its brands faster than the market. that means it is taking market share. the ceo is emphatic that the product is good. it doesn't hurt you. and finally, my main thesis for being an investor in this market, this year, last year, they had 500 million dollars in sales outside of the united states. it's growing like crazy. any company that's growing outside this country, you've got to look at it as a buy. stuart: you're not worried about lawsuits because they sell caffeinated energy drinks, you don't care about that? charles: not really. they said they are going to do their labelling changes. i'm worried about the government more than individual lawsuits. stuart: the big story this week in the gaming industry has been new jersey has legalized on-line gaming. here's a question, we're a financial program. how much money does that bring in to the state? let's bring in jeff ma, former member of the m.i.t. black jack team.

now he's a ceo. here's an opinion from me, i don't think that on-line poker or black jack, casino table games is going to bring in that much money for new jersey or any other state that does it. i think -- and you tell me if i'm right -- the big money is on sports gambling on-line, which is not here yet, but that's where the big money is. what do you say? >> yeah, no, i definitely agree. i think that's what governor christie is really trying to push for, and that's really where the breakthrough is going to happen. i mean, the high end estimates of some of this stuff is, you know, 12 billion and then 15% of that is 2 billion, across the country. but if you talk about the illegal -- the money that's bet illegally on sports in the u.s., they estimate anywhere that anywhere from 200 to 400 billion dollars which means you are talking about up to 60 billion dollars in revenue for the states. so i agree with you, absolutely, that legalized sports betting in these states would really be the big boon. stuart: but there's serious resistance to that, isn't there? i mean people say well you start

bribing athletes to throw a game or something. >> well it doesn't -- stuart: if you can do this at home, that's going to bring out the gambling addicts, isn't it? >> no, i mean, i think that the -- a lot of the resistance that you hear is reminiscent of prohibition or anything like that. right now you are talking about making it illegal so it is much easier to hide things like point shaving. if you make it transparent, it is much easier to expose it. if people are doing something illegal, it is harder to seek help that they have a problem with. they are doing something illegal so they are even more embarrassed about it. i think making it legal will help things like exposing potential point shavings or potential problems. stuart: if you had to put a bet on it, do you think new jersey will get sports gaming on-line any time soon? >> not soon. i would say we're still a few

years away. stuart: by the way, you made a lot of money card counting in the casinos. i think you are banned from most casinos as i recall. you can't count cards if you're playing on-line, can you? >> well, i have no idea what the on-line situation is going to look like. that exposes a great thing which the fact that the experience on-line is so different than the experience in the casino that i don't think these people have any idea what kind of revenue they will generate from the on-line casinos. that points to the fact that sports betting which is already done on-line quite a bit and is already very popular will be the place where as governments they can generate a lot of revenue if they legalize it. stuart: you're not keen on on-line gaming, you don't play on-line? >> no, i mean, what's the fun in sitting behind your computer and playing black jack against the computer? i can't see why that would be something that i would spend a lot of time doing. stuart: because you can't count cards, that's it, isn't it? [laughter] >> well, i don't like to do

things where i'm not going to make money, stuart, just like you i'm sure. stuart: oh of course. jeff ma you know what you are talking about and we appreciate that. thank you very much indeed. come and see us again soon. >> yes. stuart: bob woodward not the only one who said he was threatened by the white house for his reporting. we will bring you another one after this. you will definitely want to hear this. the american dream is of a better future,

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stuart: bob woodward the watergate reporter said publicly many times that the spending cuts were the president's idea. he then says he was threatened by the white house. specifically by white house economic advisor gene spurling and he's not the only one who says he was threatened. listen to this from lanny davis, former advisor to president clinton. >> that exact thing happened to me and i haven't spoken of this before. stuart: that's quite a threat made by the administration to lanny davis. that's the obama administration to lanny davis. what are you reading between the lines, charles? charles: you know, it's interesting when people come out and start to be honest about things, you know, no one has a better -- lanny has a tremendous reputation. bob woodward has a great

reputation. and it's interesting that the media is so focused on the disintegration of the republican party, but they are starting to be there a little bit of friction between the democratic party as well. stuart: i think the media will start pushing back now. they are going after their own. liz: it is also reminiscent remember before the election last year david axelrod reportedly threatening gallup for publishing unfavorable poll results about the president. and the department of justice threatening to sue gallup essentially because they possibly mischarged the government, but, you know, these threats don't really play out very well in the media. people don't like it. stuart: no they don't, but will the media which has been the cheerleading section for the obama camp for four years, will the media now turn around and say, you know, maybe we have gone too far. maybe we'll step aside. maybe we'll ask some harsh questions to the president. maybe we'll ask some accountability. charles: what radio station was that that lanny was on?

stuart: it was out of washington. charles: it wasn't cnn or msnbc or cbs. we're talking about an individual democrat who is saying i'm going to be honest about everything. between the media and hollywood, i don't know if you saw the oscars or not, but that relationship will not be severed. liz: it is unfortunate because the viewer out there is not getting the information they need. charles: that's the sad part. liz: what's going on in washington. stuart: as you mentioned, i think there's some internal politics going on here. lanny davis is very much the clintons guy. and now that hillary clinton is no longer part of the administration, i think the clintons and their people really are able to have a go at president obama in the way they were not in the past. liz: i have personally spoken to lanny davis about that and he said just that. stuart: real fast, i have to leave you, breaking news the pope leaving the vatican. i believe we have live pictures from rome. this is happening now. of course there is a time difference. the pope essentially leaves his position at 8 p.m. this evening.

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